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The Parliamentary Under-Secretary of State for Defence (James Heappey)
It is a pleasure to serve under your chairmanship, Ms McDonagh, on my maiden voyage as a Minister. I am slightly nervous of inadvertently spending loads of money and getting told off when I get back to the Department, but it gives me great pleasure to respond to the debate. I congratulate my hon. Friend the Member for Witney (Robert Courts) on securing it. Last Thursday, he and I had the opportunity of visiting RAF Brize Norton in his constituency. He is an eloquent and passionate supporter of the Royal Air Force and of its importance to the community that surrounds the base. It is fantastic to see today that his interest extends beyond the parochial to a wider interest in defence matters.
I should add that in my previous career I had some first-hand experience of the fantastic work of those who serve in our joint helicopter command. They have flown me in Northern Ireland, Iraq and Afghanistan, on occasion with things travelling very fast to try to hit us. The courage that our helicopter pilots show while flying in combat zones and the amazing ingenuity of the engineers who keep them flying, often in challenging environments, is not to be underestimated. So, at the start of my first opportunity to speak as a Minister, I put on record my admiration for those who fly and support our helicopters on operations.
Defence already supports 115,000 jobs across the UK—one in every 220—through £18 billion of annual spending with industry. There is an opportunity for that to translate positively into the Government’s levelling-up agenda. This year, as we go through the integrated defence, security and foreign policy review, we will seek to understand the opportunity to participate in that levelling-up agenda, and to see how we can spend that defence budget to have effect in the regions of the UK where there is opportunity to invest in defence.
I am pleased to say that I have personal experience of that, having seen it with the rotary sector in Somerset. This year will see the opening of the iAero Centre in Yeovil, for which my hon. Friend the Member for Yeovil (Mr Fysh) campaigned vigorously. That facility will drive innovation in local aerospace and promote its ongoing competitiveness in the UK and the world. It has been made possible by Defence’s long-term investment in Leonardo helicopters and the financial commitment of Somerset County Council and the local enterprise partnership.
The centre will deliver a real opportunity for our region, but also for industry and academia to collaborate on innovation. It will be an accelerator for our region’s goals of looking at how clean tech can be employed in manufacturing and focusing on future developments in autonomy, artificial intelligence, hybrid and electric power, as well as other sustainable technology in advanced manufacturing and engineering.
Our investment in rotary will act as a catalyst for wider innovation, which is hugely exciting. Having seen how that opportunity might work in Somerset, and having recently visited other defence companies that are investing in skills and innovation in the communities in which they operate, I am clear that there is a real opportunity to exploit that further. It is a very exciting proposition and one that I am looking to make an important part of my work in this brief over the years ahead.
The hon. Member for Glasgow North West (Carol Monaghan) made an excellent point about people in the defence industry. She is right to note that, too often, when we walk into a boardroom in a defence company, it is very male indeed, and that quite a large part of the senior workforce in those places is very male indeed.
I have noticed an interesting discrepancy between the graduate entry into defence companies, which is still very male, and the apprenticeship-level entry coming directly in at 16, which is much more balanced. That is a very interesting issue for us to explore. Why is it that male and female students look at an apprenticeship in the defence industry with equal enthusiasm, yet when we come to recruiting people out of universities into engineering roles in defence, we have less success?
Carol Monaghan
Some of these companies have told me that they will actively go out and recruit a certain number of girls and a certain number of boys. That does not seem to be happening to the same extent at graduate level—maybe the women simply are not there at graduate level—but I would agree that at apprenticeship level we are seeing some improvements.
James Heappey
I thank the hon. Lady for her interest. The best way to accelerate the pursuit of equality in defence companies’ recruitment is for those of us in ministerial office or shadow roles—and, indeed, those with a wider interest in defence—to put pressure on them to do that. There is clearly a workforce challenge when it comes to high-end engineering. The fact that we are not good enough collectively at attracting half the population into defence roles is clearly an area for significant improvement within the industry.
Moving on to equipment, I should say that over the next decade we are spending more than £180 billion on equipment and support. That includes £9.6 billion specifically on rotary wing. However, our financial commitment to rotary is much greater, at nearly £24 billion over the next decade, including infrastructure, personnel and training, all of which will have a positive impact on local economies.
Our armed forces are obviously the biggest customer of the UK helicopter industry. I will summarise some of the investments the Government have made to date, which include more than £1 billion to develop and manufacture 62 Wildcat helicopters, £900 million on delivering 30 Merlin Mk 2 into service, about £300 million on upgrading the Merlin Mk 4 across a 25-aircraft fleet and £271 million on Wildcat support. My hon. Friend the Member for Yeovil made a point about arming the land variants of Wildcat; the maritime version will already have a missile, and I am certain that the Chief of the General Staff will have noted his suggestion that the land variant might have one too. We have also put £269 million into CROWSNEST. Finally, this year, the first of the new Apache AH-64e models will arrive in the UK and provide a step change in capability for our land forces. Through that continued investment, our rotary capability is growing.
Those developments have been made possible by our relationship with the rotary-wing industry. Airbus continues to support the Puma fleet and provide our training helicopters, which are modified in Oxford. In Yeovil, Leonardo continues to be the only UK-based company with an end-to-end design, build and support capability. It is seen as world leading in advanced rotor systems, transmissions and blade technology.
Our long-term commitment to Leonardo through the 10-year strategic partnering arrangement has allowed it to have the confidence to invest in its skilled Somerset workforce, technology and supply base. It has 2,795 highly skilled jobs, with many more in the supply chain; 114 apprentices and 33 graduates, with a further 65 joining this year; and £340 million invested in UK R&D over the past five years and around £400 million per year with over 800 UK suppliers, including 105 small and medium-sized enterprises.
We have also bought highly capable rotary platforms from Boeing and, through our partnering initiative, have secured Boeing investment in advanced manufacturing in Sheffield. Boeing, in turn, has committed to increasing UK jobs and supply chain opportunities, including UK companies’ providing 5% by value of the entire Apache AH-64e fleet.
A key part of the Government’s rotary strategy and defence industrial policy is a collaborative approach to exports. Exports will continue to be fundamental to delivering affordable equipment to our armed forces and greater value to the UK. With the support of the UK Government, industry won export orders worth £14 billion in 2018.
Rotary is an important part of that export success. We supported the export of £12.3 billion of sales of Merlin, Wildcat and Lynx, and have enabled around £8 billion of associated support business. That has allowed Leonardo to invest in skills and generate new products in the UK. Most recently, that included the export of the AW101 Merlin helicopters to Norway and Poland and sale of the AW159 Wildcat helicopters to the Republic of Korea.
I move on to the rotary strategy, which is the crux of the debate. We all know that we now operate in a more uncertain, more complex and more dynamic environment. As we develop our future operating concept for our modernised force and consider what that means for our rotary-wing strategy, we must be mindful of certain technological improvements.
This afternoon, I had the opportunity to sit down with the former director of the Defense Acquisition Program Administration and the Ministry of Defence’s former and current chief scientific adviser, to have exactly that discussion about how, with an exponential technological curve, we make the right decisions about future capability to avoid fielding capability that is already near obsolete. This is a timely discussion about what that looks like specifically in the rotary space.
We believe that manned rotary capability will continue to be a vital requirement in all environments, but it will increasingly be teamed with small unmanned systems and may in some areas be replaced entirely by large autonomous systems by the 2040s. We are innovating with industry to test these unmanned air systems and ensure that our UK armed forces can access what they need. These unmanned systems range from small vertical take-off and landing systems to very large-scale, 2 or 3-tonne unmanned air systems, which our Royal Navy sees as critical to the future maritime environment.
The Navy’s discovery, assessment and rapid exploitation team is partnering with innovative UK companies to develop small rotary or vertical take-off and landing unmanned aircraft systems technology. This includes £250,000 investment with Malloy Aeronautics to develop a tethered rotary drone. The MOD has already invested with Leonardo helicopters on rotary-wing unmanned concepts, and we continue to discuss how we might develop a UK large rotary unmanned air system that could support rotary assets in the future.
As I have explained, the environment we operate in will continue to change. This is an ideal opportunity to review our approach to rotary-wing capability ahead of big decisions on future capability. This debate has also highlighted that it is not just about equipment. The 2009 rotary-wing strategy recognised the need to change how we operate our rotary-wing capability. Since then we have rationalised our core fleet to only five platforms, providing efficiencies in how we operate, man and support these platforms, to be an effective fighting force.
Our aim is to ensure that we can mobilise, modernise and transform the way we develop and operate rotary capability across Defence. This is not just about platforms, personnel training, infrastructure and in-service support, all of which will be vital in delivering our aims; we must ensure that the enterprise is as efficient as it can be, so that we can deliver more military capability to the frontline.
Our thinking is also informed by our international partners, some of which have been discussed in the debate today. We are leading efforts within NATO to look at next-generation rotorcraft concepts and opportunities. This will help to drive consensus on what the future requirements will be and ensure that industry is ready to meet them. We are also observing the US army’s ambitious future vertical lift programme to develop a family of new-generation helicopters. There is much we can learn from the US approach and conclusions, but we have made no decisions on our future rotary requirements, or on how we would deliver them.
Our review of the rotary-wing strategy will need to inform and be informed by the Government’s overall defence and security objectives. That is why I am pleased that the Government are committed to the deepest review of Britain’s security, defence and foreign policy since the end of the cold war. I note the shadow Minister’s hope that a timeline might be confirmed soon; I am sure that news will be forthcoming. The MOD will enthusiastically participate in that review, and it will ensure that we have in place the right strategy to meet the challenges and opportunities that we face as a country in the decades ahead.
The industrial backdrop and some of the themes mentioned—skills, exports and new technologies—are applicable across our industrial base. Our refreshed defence industrial policy, published in December 2017, sets out our commitment to encouraging a thriving and globally competitive UK defence sector. We have decided in the past to adopt alternative approaches in specific areas—shipbuilding and combat air—and we continually assess our approach to other sectors to determine whether we need to develop separate strategies or whether they can form part of a wider defence industrial strategy.
This Government recognise the importance of the defence rotary-wing capability today and in the future. We will continue to ensure that our long-term strategy is coherent and encompasses the equipment, support, training, basing infrastructure and the industry that we need to deliver it. Moreover, we see this as an opportunity for the defence pound to contribute meaningfully to the Government’s levelling-up agenda. It is encouraging to note the number of local enterprise partnerships that have included defence and aerospace in their regional industrial strategies.
The rotary sector has a great story to tell, and it is fortunate to have champions in Parliament as eloquent and knowledgeable as my hon. Friends the Members for Witney and for Yeovil. It is also good to hear the considered and largely consensual contributions from the Opposition parties. I am particularly looking forward to working cross-party in defence—although I am sure we will have our moments. This is an area of policy where everybody wants the best for the soldiers, sailors, airmen and marines who ultimately have to go to dangerous places on behalf of our country. I am really looking forward to working with spokespeople and shadow Ministers on the Opposition Benches to make sure that, as we go through this security, defence and foreign policy review, there is an opportunity to share our ideas together, so that we can come to some sound and enduring conclusions.
Finally, there is understandable pressure from my hon. Friend the Member for Witney, who has sought this debate principally to raise an ambition for a rotary-wing strategy. My gut feeling is that in a year when we are looking more broadly at defence, security and foreign policy needs, and seeking to understand the threats that are emerging and how we will counter them across all five domains—land, sea, air, cyber and space—we first need to understand all of that and work out from it what our strategic ambition is, which is exactly what the strategic defence and security review is there to do. We need to work out what the role is for the defence pound and the levelling-up agenda, and how that contributes to a defence industrial strategy, and then look beyond that at whether there is a requirement for bespoke sector deals, or whether the wider programme actually covers what we need. I hope that my hon. Friend will be patient and will participate, just as all other colleagues will. This is going to be a fascinating time to be involved in defence policy, and I look forward to hearing the further thoughts of colleagues as the year goes on.